I’ve talked about reviewing past spending to get a sense of the biggest expenditure categories so we can target those. It’s easy to see how reducing spending on big purchases like home furnishings (which can run hundreds or thousands of dollars in one fell swoop) could lead to impressive saving results. Same with other big ticket items — having a manageable rent or mortgage, for example, or reducing spending on food, which is one of our biggest spending categories.
What’s harder to conceptualize is the aggregate power of little spends that will eat up your earnings and leave little left for growing your pot of gold. It’s hard to wrap your head around because it happens little by little. Five dollars here, twenty dollars there, and you never have that moment of sticker shock at the register or the feeling that you’re buying some big luxury item to snap you to attention.
This was one of the startling things I realized when I started tracking my spending week by week back in the olden days of Frugal 2014. Let’s look at one random week’s worth of spending from those early days as an example:
|Walgreens (toothpaste, toilet paper, floss)||$22|
|Subway (lunch at work)||$7|
|Registration fee for a road race||$39|
|A lottery ticket and a lemon||$2|
|Breakfast at the cafeteria at work||$3|
|Jimmy John’s (lunch at work)||$9|
|Bike repair & new clips for bike pedals||$77|
|Happy hour with colleagues||$5|
|Lunch on the weekend||$10|
|Face wash and other personal care products||$147|
Wow. It doesn’t look like I was doing anything too crazy there, does it? A few lunches out (nothing you’d get excited about, mind you, we’re talking about fast food sandwiches), a couple little home goods, and a big spend on beauty products — unusual, but not THAT spendy. And yet… for that week, I wound up spending almost $400. And I’d say that’s pretty typical of any week you look at (and I have many, many weeks since the beginning of Frugal 2014 to choose from). There might be one or two bigger spends, usually not huge, and lots of little purchases to fill out the balance.
Targeting little spends involves changing your attitude and your habits around daily spending, which takes some determination and focus. In addition to specifically focusing on some big categories of spending, we’re trying to reform our attitude towards these little spends, considering every one instead of blithely buy-buy-buying things. Does this sound unpleasant to you? Let me try and make it more appealing.
I never want to live a life where I feel I can’t make a small purchase that will make me happy. But the second half of that sentence is the key — a small purchase that will make me happy. On this new frugality kick, I ask myself before every spend, “will this make me happy?” Sometimes, I ask, “would I rather make a purchase like this every day, or get to spend my afternoons with my delightful son and pursuing my interests instead of sitting at my stupid desk in my stupid office?” That usually does the trick.
It also means that I enjoy the purchases I do make more. For example, the other day I was walking home from work. It was warm out, and I hadn’t had enough water to drink that afternoon. I started craving some bubble tea something fierce, which costs $5 — kind of a ridiculous amount to spend on a beverage. But the more I thought about it, the more delightful that nice cold bubble tea sounded to close out the day. The answer to “will this make me happy” was a resounding YES. So I got it. And it was delicious, and I drank it the whole way home. That, I would say, was $5 well spent! Spending a constant stream of $5 or $10 on Jimmy Johns sandwiches for lunch, or on random personal care (a manicure here, a face wash there) does not make the cut.
The big question is, if we manage to sustain this attitude shift, will it make a noticeable difference in our retirement goals? Well, just like the little things add up to big numbers in spending, the same holds true in savings. People love to write about this, often with clickbaity headlines like “how I saved $100,000 by kicking my Starbucks habit,” or whatever. But what I’m talking about is not one quick fix. It’s a habit change that, once established, will hopefully become automatic and permanent. Remember, the overall goal here is to get our spending way down so that we can live happily off of less. This week is the first week we’ve been using our new, improved, combined budgeting spreadsheet; as the weeks go by I’ll be able to tell you the impact this type of thinking has! So we’ll all learn the real-life outcome together.